Risks Social Media Compliance Report Final[1]

Rising Above the
Risks of Social Media:
Responsibilities and Policies in the Workplace
May 16, 2012

HR. Payroll. Benefits.

Contents
About This Guide 1

The Numbers Are Staggering 2

The Rising Tide: Federal and State Legislative Developments 3

The Rising Tide: Federal Regulatory and Enforcement Activity 6

Employees’ Misuse of Social Media 12

Disciplining Employees Who Misuse Social Media 14

Monitoring and Regulating Employees’ Use of Social Media 17

Strategies for Regulating Electronic Communications 19

Basing Hiring Decisions on Information Obtained from Social Media 20

Question of Social Media Account Ownership
Need Not Be a Problem for Employers 21

Conclusion 22

About ADP TotalSource® 23

About Jackson Lewis 23

About This Guide
Facebook, Twitter, and email may be more
addictive than alcohol or smoking

That is what a recent study says about social
media, a form of online communication that
is certainly no longer considered a fad. With
more than 1 billion users on Facebook and
Twitter alone, social media may be the biggest
cultural and economic shift since the industrial
revolution. Simply put, social media is the
dominant form of communication today.

Chances are that some of These changes have not gone unnoticed by the
your employees are on social federal government, state governments, and the
court systems. They have become increasingly
media right now. active in this constantly evolving area of the law.
They have been busy proposing and creating
Not surprisingly then, millions of employees new laws and rules, as well as reinterpreting
communicate daily via social media. In fact, old ones, all in an effort to catch up with social
chances are that some of your employees are on media’s impact on the workplace.
social media right now. And employers are just
These rapid changes have caught some
as likely to be using social media —investigating
employers off guard. Are you prepared? The
job applicants’ Facebook, LinkedIn, and Twitter
purpose of this special report is to provide
profiles during the recruitment and hiring stages.
employers with timely information to prepare
Employers are also increasingly turning to social
for, and plan for, the substantial impact that
media for information about the conduct of
social media is having in the workplace.
current employees.

Rising Above the Risks of Social Media: Responsibilities and Policies in the Workplace 1

The Numbers Are Staggering
Facebook dominates social media traffic. It has himself/herself professionally (65 percent); to see if
more than 900 million monthly active users, and it the candidate is a good fit for the company culture
is estimated to reach one billion users by August (51 percent); to learn more about the candidate’s
2012. That is an amazing number — approximately qualifications (45 percent); to see if the candidate is
14 percent of the world’s population. Twitter, which well-rounded (35 percent); and to look for reasons
is also prevalent, has nearly 500 million registered not to hire the candidate (12 percent).
users and is still growing at an astounding rate.
A third of hiring managers who currently research
candidates via social media said they have found
Hiring managers are using social information that has caused them not to hire
media to evaluate candidates’ a candidate. The reasons range from evidence
of inappropriate behavior to information that
character and personality outside contradicted their listed qualifications: candidate
the confines of the traditional posted provocative/inappropriate photos/
information (49 percent); there was information
interview process. about candidate drinking or using drugs (45
percent); candidate had poor communication
Employees’ private and workplace lives easily skills (35 percent); candidate bad-mouthed
intersect on social media, where boundaries previous employer (33 percent); candidate made
become blurred. Of the millions of employees discriminatory comments related to race, gender,
who use social media sites, one recent survey religion, etc. (28 percent); and candidate lied about
revealed that 39% have befriended a colleague or qualifications (22 percent).
business contact on Facebook or LinkedIn; 14%
have posted a status update or tweeted about their Lastly, according to the survey, employers are
work; 22% have posted a status update or tweeted also looking for information that could potentially
about a work colleague; and 28% have posted give a job seeker an advantage. A third of hiring
photos of colleagues or business activities. Yet, a managers said they have found something that
recent survey by the Society for Human Resources has caused them to hire a candidate, including
Management shows that 69% of employers the following: good feel for candidate’s personality
surveyed do not track employee use of social (58 percent); conveyed a professional image (55
media on company-owned computers or devices. percent); background information supported
professional qualifications (54 percent); well-
Employers are also actively using social media. rounded, showed a wide range of interests
For example, nearly 40 percent of employers (51 percent); great communication skills (49
use social networking sites to research job percent); candidate was creative (44 percent); and
candidates, according to a recent survey from other people posted great references about the
CareerBuilder. The survey reveals that hiring candidate (34 percent).
managers are using social media to evaluate
candidates’ character and personality outside the Point being, the use of social media in the
confines of the traditional interview process. When workplace is here to stay. While employers cannot
asked why they use social networks to conduct prevent all of the legal risks associated with social
background research, hiring managers listed the media, they can manage them.
following reasons: to see if the candidate presents


The Rising Tide: Federal and State
Legislative Developments
For years, there really was no law that privacy of your friends. We have worked
specifically addressed an employer’s right really hard at Facebook to give you the
to use social media to collect information tools to control who sees your information.
about applicants or current employees.
That is quickly changing. As a user, you shouldn’t be forced to
share your private information and
Federal legislative developments communications just to get a job. And as
On March 22, 2012, U.S. Senators Charles the friend of a user, you shouldn’t have
Schumer and Richard Blumenthal called on the to worry that your private information
U.S. Equal Employment Opportunity Commission or communications will be revealed to
and the U.S. Department of Justice to investigate someone you don’t know and didn’t intend
whether employers violate any privacy, fraud, or to share with just because that user is
anti-discrimination laws by demanding access to looking for a job. That’s why we’ve made
job applicants’ Facebook accounts before making it a violation of Facebook’s Statement of
a hiring decision. Rights and Responsibilities to share or
solicit a Facebook password.
The next day, March 23, 2012, Facebook publicly
joined the discussion. The Company’s Chief We don’t think employers should be asking
Privacy Office posted the following blog entry on prospective employees to provide their
the Company’s website: passwords because we don’t think it’s the
right thing to do. But it also may cause
In recent months, we’ve seen a distressing problems for the employers that they
increase in reports of employers or others are not anticipating. For example, if an
seeking to gain inappropriate access to employer sees on Facebook that someone
people’s Facebook profiles or private is a member of a protected group (e.g., over
information. This practice undermines the a certain age, etc.) that employer may open
privacy expectations and the security of themselves up to claims of discrimination if
both the user and the user’s friends. It also they don’t hire that person.
potentially exposes the employer who seeks
this access to unanticipated legal liability.
The Social Networking Online
The most alarming of these practices is
the reported incidents of employers asking Protection Act would prohibit
prospective or actual employees to reveal employers from requiring such
their passwords. If you are a Facebook
user, you should never have to share your
information or to deny employment
password, let anyone access your account, or penalize candidates or
or do anything that might jeopardize the
security of your account or violate the
employeess for refusing to provide
such information.


One month later, on April 27, 2012, federal discharge, discipline, or otherwise penalize
legislators introduced proposed legislation to bar employees or applicants who refuse to comply
current and prospective employers from requiring with requests for such information. In addition,
job candidates and employees to submit their employers may not fail or refuse to hire applicants
user names and passwords for social networking who object to similar requests.
sites. The Social Networking Online Protection
Act, introduced by U.S. Representative Eliot Other states are likely to follow suit. California
Engel, would prohibit employers, schools, and is considering legislation that would make it
universities from requiring such information illegal for companies to request or require
or to deny employment or penalize candidates, employees and job candidates to disclose their
employees, or students for refusing to provide social media user names and passwords. The
such information. proposed legislation would also prohibit colleges
and universities from requiring the information
“The American people deserve the right to from students. If a company refused to hire a job
keep their personal accounts private,” said U.S. applicant because of information obtained on a
Representative Jan Schakowsky, a co-sponsor social networking website, the applicant could
of the bill. “No one should have to worry that bring a lawsuit.
their personal account information, including
passwords, can be required by an employer or
educational institution, and if this legislation is Maryland became the first state
signed into law, no one will face that possibility.”
to make it illegal for employers to
“Social media sites have become a widespread demand user names, passwords
communications tool — both personally and
professionally — all across the world,” Engel or other means to access any
said in a statement. “However, a person’s so- personal account.
called ‘digital footprint’ is largely unprotected.
Passwords are the gateway to many avenues
containing personal and sensitive content — Illinois is considering legislation that would make
including email accounts, bank accounts, and it illegal for an employer to request a password
other information.” The legislation is still pending. or related account information from an employee
or prospective employee in order to access that
State legislative developments person’s social networking site. The proposed
States are also active in this area. On May 2, 2012, legislation specifies that it does not limit an
Maryland became the first state to make it illegal employer’s right to maintain lawful workplace
for employers to demand user names, passwords, policies governing the use of its electronic
or other means to access any personal account equipment or monitor that use without requiring
or service through an electronic communication an employee to provide any social networking
device (computer, phone, PDA, etc.), such passwords. The proposed legislation also would
as social media sites Facebook or LinkedIn, not bar an employer from getting information
belonging to employees or job applicants. The about a prospective employee or current employee
new law becomes effective October 1, 2012. The that is in the public domain.
law applies to any employer engaged in business
in Maryland, as well as any unit of state or local
government. It is also illegal for employers to


New York is considering legislation that would
make it illegal for an employer or employer’s
agent, representative, or designee to require
any employee or applicant to disclose any log-in
name, password, or other means for accessing a
personal account or service through an electronic
communications device. Moreover, an employer
or its representative may not fire, discipline,
or otherwise penalize a worker for refusing to
cough up passwords or other information used to
access personal social networking sites. Refusal
to provide a password or access to a social media
site cannot be used as a reason to refuse to hire a
candidate for a job. Violators are subject to a
$300 fine the first time around and a $500 fine
for each subsequent violation, according to the
proposed legislation.

Michigan and Minnesota are also considering
legislation that would make it illegal for
employers to require applicants to disclose their
passwords to social networking sites.

So far, none of these proposed laws would restrict
an employer’s ability to find and use information
that is publicly available on social media.
Nonetheless, employers need to closely monitor
these developments and ensure compliance with
the laws that are passed in the upcoming months.


The Rising Tide: Federal Regulatory
and Enforcement Activity
In addition to legislative activity at the federal employee’s conduct that is protected by Section
and state levels, there has been regulatory 7 of the Act. Section 7 protects employees who
and enforcement activity by various agencies engage in “concerted activities for the purpose
of the federal government, including the Equal of collective bargaining or other mutual aid or
Employment Opportunity Commission and the protection.” Importantly, the Act does not just
National Labor Relations Board. protect employees who engage in union activities
or work in a unionized environment. It also protects
Employee complaints are nothing new, but social other forms of employee conduct undertaken
media sites like Facebook have given workers a for their “mutual aid or protection” including,
new avenue for their gripes. While online venting for example, a group of nonunion employees
may not sit well with employers, as discussed complaining to management about their wages or
below, employers should be cautious about taking working conditions, participating in a strike or work
disciplinary action over arguably insulting posts stoppage, or attempting to enlist public support to
and tweets. improve their terms or conditions of employment.
National Labor Relations Board The Board’s Acting General Counsel, Lafe
If you plan to skip this section because you do not Solomon, spoke at a legal conference on
have any unionized employees, you are making November 3, 2011. He said the appearance gave
a mistake. Employers who ignore the National him “a chance to explain to the 93 percent [of
Labor Relations Act (Act) do so at their own peril. private-sector workers] who are not represented
When it comes to social media in the workplace, by unions the National Labor Relations Act” and
the National Labor Relations Board (Board) is a principles of protected concerted activity under
powerful enforcer of rights for unionized and non- the Act. Mr. Solomon said the Board is receiving
unionized employees alike. The Board has been hundreds of unfair labor practice charges from
more active — and successful — in this area than individuals asserting that employers violated their
any other federal agency. NLRA rights by punishing them due to their use
of social media . Like other charges filed with the
Board’s regional offices, he said, some will not to
While online venting may not sit have merit. Nonetheless, he said it is a positive
well with employers, employers development that more workers are “waking up”
to rights that are guaranteed by the Act, but have
should be cautious about taking been unfamiliar to the general public.
disciplinary action over arguably
August 2011 Board Report
insulting posts and tweets. On August 18, 2011, Mr. Solomon released a report
summarizing 14 recent cases the Board considered
By way of background, the Board enforces the involving employees’ use of social media, including,
Act. When the Board says that an employee has Facebook, Twitter, YouTube, text messages,
engaged in “protected concerted activity” on social video, images, podcasts, and other multimedia
media or otherwise, the Board is referring to an communications. Without providing express


guidelines in the August 18 report on how an her coworkers. The coworkers also wrote negative
employer, whether unionized or not, can establish remarks about the supervisor, some of which
and enforce a lawful social media policy, the report included profane language. After the employer
discusses recent cases from the Board to shed found out about the post, the employee was
light on activities the Board likely will or will not terminated for violating the employer’s Internet
consider protected under the Act. policies. The Board found that the employee had
engaged in a protected activity by exercising her
Out of the 14 cases discussed, the Board found right to discuss supervisory actions with coworkers.
in four that an employee’s posts on Facebook or
Twitter constituted “protected concerted activity;” in
five cases, that an employee’s posts on Facebook or
Twitter did not warrant protection under the Act; in
It is important for employers to
four cases, that some provisions of the employers’ understand that an employee’s
social media policies were overly broad and social media use likely may be
unlawful; and in one case, that the employer’s media
and press interview policy was lawful and valid. considered protected concerted
Protected concerted activity
activity when the comments or
Many conversations that start in the workplace
posts involve shared concerns
continue in social media. It is important for over terms and conditions of
employers to understand that an employee’s social
media use likely may be considered protected
employment.
concerted activity when the comments or posts
involve shared concerns over terms and conditions
of employment. Posts can be considered protected Activities not protected by the Act
when they derive from or are a direct “outgrowth” Social media posts that do not involve a discussion
of an earlier discussion among coworkers about with other employees and are not directed to other
their terms and conditions of work. Facebook employees, that do not discuss the terms and
or Twitter posts directed to coworkers to invite conditions of employment, or that include offensive
or induce further action also are likely to be or inappropriate comments directed toward an
considered protected concerted activity. Further, employer’s clients are not likely protected under
a post that is offensive or laced with profanity or the Act. In one case, a bartender was terminated
sarcasm still may warrant protection under the for posting a message on Facebook regarding his
Act if the content is derived from shared concerns employer’s tipping policy. Pursuant to the policy,
about the terms and conditions of employment. waitresses were not allowed to share tips with
bartenders. The employee had a conversation on
In one case, the employer, an ambulance service,
Facebook with a non-coworker family member,
terminated an employee for posting negative
complaining about the lack of raises and tips. The
remarks about her supervisor on Facebook. The
employee described the employer’s customers as
employer’s Internet and blogging policy prohibited
“rednecks” and stated that he hoped they would
employees from making disparaging remarks when
choke on glass as they drove home from the bar.
discussing the company or supervisors and from
The Board found the employee’s posts were not
depicting the company in any media without its
made in concert with other employees, but solely
permission. From her personal computer outside
on his own behalf, even though they concerned
of working hours, the employee posted a criticism
the terms and conditions of his employment.
about her supervisor which drew responses from


Additionally, the Facebook conversation did not grow Another provision the Board found overly broad
out of another conversation with a coworker, nor did included restrictions on revealing (including
any of his coworkers respond to his postings. through photographs) personal information
regarding coworkers, company clients, partners,
In a separate case, the Board found a journalist’s or customers without their consent, without any
termination was lawful. He was fired for tweeting limitation or examples of what is covered. The
unprofessional comments about his employer, local Board also found this provision could reasonably be
homicides, and criticisms about a local television construed as a restraint on protected activity.
station. The Board found that the posts were
inappropriate and offensive and did not relate to Additionally, the Board found that forbidding
the conditions of his employment or seek to involve employees from discussing the terms and
other employees in issues related to employment. conditions of employment or sharing information
Therefore, they did not involve a protected activity. about themselves or fellow employees with
each other or nonemployees violates the Act. It
Overly broad social media policies also concluded that prohibiting employees from
In several cases, the Board found the employer’s using the employer’s logos and photographs of
social media policy overly broad. These cases have the employer’s store, brand or product, without
provided employers with guidance on drafting a written authorization, was unlawful. It found this
lawful policy. In one case, the employer’s social ban was overly broad in that it could prevent an
media policy prohibited employees from using any employee from posting pictures of employees
social media that may violate, compromise, or carrying a picket sign depicting the employer’s
disregard the rights and reasonable expectations name, peacefully handbilling in front of a store, or
as to privacy or confidentiality of any person or wearing a t-shirt displaying the employer’s logo in
entity. It also prohibited any communication or post connection with a protest over terms and conditions
that constitutes embarrassment, harassment, or of employment, all which are protected activities.
defamation of the employer, any other employee,
officer, board member, and representative or staff January 2012 Board Report
member. The Board found these provisions overly On January 24, 2012, Mr. Solomon issued a second
broad, concluding that employees could reasonably report on more recent social media cases that
construe the policy to prohibit protected conduct. have been decided by the Board. The January 24,
The Board highlighted that the policy also provided 2012 report discusses social media policies and
no guidance as to what the employer considered chronicles additional actions taken by the Board on
to be private or confidential. Further, the policy unfair labor practice charges involving the use of
included several broad terms, but no definitions or social media by employees.
limits that would exclude protected activity from
their reach. The January 2012 report reviews 14 charges,
several of which allege that the language of the
The Board found several other social media employer’s social media policy violated the Act.
policies overly broad, with terms and prohibitions For example, in one case the social media policy
that reasonably would be construed as prohibiting required employees who had identified themselves
protected activity. In these policies, the employers as employees of the employer on social media sites
prohibited employees, on their own time, from to state, each time they posted, that their comments
blogging about company business, posting contained only their personal opinions and did not
anything that they would not want their manager necessarily reflect the employer’s opinions. The
or supervisor to see, and posting pictures or Board found that provision unlawful because:
comments involving the company or its employees
that could be construed as inappropriate.


. . . requiring employees to expressly state use the employer’s name and logo while
that their comments are their personal engaging in protected concerted activity…
opinions and not those of the employer
every time that they post on social media Employers should use great caution when writing
would significantly burden the exercise social media policies. These policies are receiving
of employees’ Section 7 rights to discuss great scrutiny by the Board, and provisions that
working conditions and criticize the may appear harmless on their face, such as those
employer’s labor policies, in violation of noted above, may not be.
Section 8(a)(1).
Recent Board Comments
On March 1, 2012, the Board’s regional director
Employers should use great in Fort Worth, Texas reminded attendees at a
legal conference that it would be a violation if the
caution when writing social employer takes action, in response to a Facebook
media policies. or other social media communication, that would
“reasonably chill” employees in the exercise of their
Section 7 rights under the Act.
The same policy also required employees to obtain
approval to identify themselves as the employer’s The regional director said that social media is
employees on social media sites. The Board also a “hot, hot subject,” with more than 100 cases
found this provision unlawful because: involving Facebook postings filed with the Board
between 2009 and 2011. The standard that the
personal profile pages serve an important Board applies in Facebook and other social media
function in enabling employees to cases are rules that have evolved over 70 years of
use online social networks to find and case law. “We are not saying that an employee can
communicate with their fellow employees say or do anything; it has to be in concert with other
at their own or other locations …. [T]his employees and it must be protected. It can’t be so
policy, therefore, [is] particularly harmful to egregious or it will lose protection under the NLRA,”
the Section 7 right to engage in concerted the regional director said.
action for mutual aid or protection and [is]
unlawfully overbroad. In social media cases, the regional director reminded
attendees that the Board will apply its standard
Another provision of that policy prohibited use of analysis for protected concerted activity. She
the company’s name or service marks outside the explained that the Board generally looks at four
course of business without prior approval of the factors when deciding whether employee speech
employer’s law department. The Board found this amounts to protected concerted activity—the place
provision unlawful, stating: of the discussion, the subject matter, the nature of
the employee’s outburst, and whether the outburst
Employees have a Section 7 right to was provoked by the employer’s unfriendly practice.
use their employer’s name or logo in
conjunction with protected concerted Equal Employment Opportunity Commission
activity, such as to communicate with fellow Employers that use social media to make
employees or the public about a labor employment decisions “need to be consistent” in
dispute. We concluded that this provision order to avoid claims of disparate treatment or
of the policy could reasonably be construed disparate impact under Title VII of the 1964 Civil
to restrict employees’ Section 7 rights to


Rights Act, according to a trial attorney with the water cooler — with management overhearing
EEOC who spoke at an August 26, 2011 workshop. it. Such a scenario falls within the “inadvertent
acquisition” exception to GINA’s prohibition on
The EEOC attorney advised employers to set clear the employer’s acquisition and possession of
guidelines on using social media to research employees’ genetic information.
potential job candidates. He said this is necessary
because employers are privy to a great deal of Securities and Exchange Commission
information “in cyberspace” about applicants Financial advisors may not advertise using client
to which they previously did not have access. By endorsements or testimonials. The increase in the
way of example, the trial attorney mentioned use of social media connections, such as “like”
that a job candidate could have posted details buttons, increases the potential to cross regulatory
on a social networking site about being a breast lines, because such connections can be viewed as
cancer survivor or a paraplegic. “How do we an endorsement. In addition, given the particular
control employers’ legitimately trying to find out facts and circumstances, such connections could
information about prospective employees while also be viewed as testimonials.
not violating the law?” he queried. He said, “If you
wouldn’t ask for it during an interview, don’t search On January 4, 2012, the Securities and Exchange
for it online.” “It could possibly get you in trouble.” Commission (SEC) issued guidelines for financial
advisors. The SEC found that firms tend to have
overlapping policies and procedures that apply
“If you wouldn’t ask for it during to advertisements, client communications, and
electronic communications, which were confusing
an interview, don’t search for because they often do not specifically identify
it online.” social media.

The SEC suggested reviewing internal compliance
programs to determine if social media use is
The EEOC has also addressed the intersection addressed and ensure that the rules are currently
between social media and genetic information. being followed. The factors they focus on include:
Congress enacted the Genetic Information • Usage guidelines: Base restrictions upon the
Nondiscrimination Act of 2008 (GINA) to prohibit risk to the firm, which sites are approved, and
discrimination based on genetic information and which functionalities are approved.
restrict the requesting and disclosure of such • Content standards: Suggest clear guidelines for
information. GINA not only prohibits employers content or use of preapproved content.
from discriminating against employees and job
• Monitoring: Determine how to appropriately
applicants but also prohibits employers from
monitor use and the frequency of monitoring.
acquiring employees’ genetic information. In
early 2011, the EEOC released regulations that • Firm resources: Determine if there are available
make it illegal to conduct “an Internet search resources for compliance and monitoring.
on an individual in a way that is likely to result in • Participation: Determine the appropriateness
a covered entity obtaining genetic information.” of a site.
Fortunately, in the regulations, the EEOC concluded • Training: Get training on how to appropriately
that the sharing of information over Facebook, use social media, consider requirement of
Twitter, and other social networking sites is certification.
analogous to discussing such matters around the


• Personal/professional sites: Determine if the
use is through a firm-sponsored profile or
through an individually created profile. Review
the potential risks for profiles that are part of a
corporate enterprise.
• Information security: Review and address
potential information security risks with social
media use.
• Recordkeeping and document retention:
Determine whether or not recordkeeping is
being adhered to based on the Advisers Act if it
applies to the content and that documentation
is accessible as determined by federal
securities laws.


Employees’ Misuse of Social Media
Employees may intentionally or inadvertently use Hostile work environment and discrimination
social media—whether on-the-job or at home—in claims. Social networking sites and blogs
a way that poses risks for their employers. While provide employees with additional avenues for
at work, employers may suffer because employees engaging in inappropriate conduct. Employees
spend too much time on social networking sites, may vent workplace frustrations by posting
instant messaging with friends, or just surfing the discriminatory statements, racial slurs, or
Internet. Though these activities may decrease sexual innuendos directed at coworkers,
productivity, they may not necessarily result in management, customers, or vendors. If a
any additional harm. When employees use social supervisor has posted discriminatory statements
media, however, to harass coworkers, criticize regarding an employee’s protected status on
the company or its clients, reveal confidential his or her Facebook page, for example, and the
information, endorse products or services without employee is later terminated or subjected to an
proper disclosure, or engage in criminal conduct, adverse employment action, the supervisor’s
employers face far greater risks. It is important to discriminatory statements could be used as
keep in mind that employees often create these evidence that the employment action was
types of problems not because they are acting motivated by discriminatory animus in a
maliciously, but instead because they are acting— subsequent lawsuit or administrative claim.
or posting—without thinking.
Defamation claims. Employers may face
liability for defamation based on electronic
communications disseminated by employees.
When employees use social Employee bloggers, for example, can create
media, however, to harass unrest in the workplace by posting rumors, gossip,
and offensive false statements about coworkers
coworkers, criticize the company and supervisors. Negative comments made
or its clients, reveal confidential by management about a departing employee
information, endorse products may also create liability. Consider the following
example: An employee leaves Company A to take
or services without proper advantage of more promising opportunities with
disclosure, or engage in criminal Company B. Prior to starting with Company B,
her supervisor at Company A posts false and
conduct, employers face far damaging comments regarding her abilities and
greater risks. work habits on a blog. An employee at Company B
stumbles upon these comments, and Company B
withdraws its employment offer based on the false
Potential theories of employer liability for information. As a result of the comments posted
employees’ misuse of social media in the blog, the former employee may have a legal
Some of the legal risks employers face when claim against Company A and the supervisor
employees misuse social media include: for defamation or interference with prospective
economic relations.


Improper disclosure of confidential or other Federal Trade Commission (FTC) Guidelines.
protected information. Employees may According to FTC Guidelines addressing the use of
inadvertently reveal—or enable others to piece “endorsements and testimonials in advertising,”
together—proprietary or confidential information employers may face liability when employees
on a blog or social networking site, instantly comment on their employer’s services or
disseminating extremely sensitive company—or products on social media without disclosing the
client—information with the simple click of a employment relationship. Potential liability may
button. Employees may also act more deliberately, exist even if the comments were not sponsored or
such as a disgruntled employee revealing a authorized by the employer.
company’s trade secrets and other proprietary
information on a blog. In addition to these legal risks, employees may
purposely or inadvertently harm an employer’s
reputation using social media. Employees can
harm their employer’s reputation by posting
According to FTC Guidelines controversial or inappropriate comments or
addressing the use of pictures on their own blogs or websites, which in
“endorsements and testimonials some way make reference to their employer or
can be connected to the employer based on the
in advertising,” employers may individual’s status as an employee. For example, in
face liability when employees some instances employees may post statements
or videos revealing unlawful conduct outside of
comment on their employer’s work. If individuals viewing the posts or videos
services or products on social have knowledge of the individual’s employer,
or the employer is somehow referenced, the
media without disclosing the conduct may be imputed to the employer. In some
employment relationship. instances, employees may be liable for this type
of conduct, under theories of interference with
prospective economic relations, interference
Reporting requirements for child pornography. with contract, intentional infliction of emotional
Several states, including Arkansas, Illinois, distress, publication of private facts, and other
Michigan, Missouri, North Carolina, Oklahoma, speech-based torts.
South Carolina, and South Dakota, have
mandatory reporting statutes that require
information technology workers to report child
pornography found on computers they are
servicing. In cases of child pornography or other
illegal electronic conduct, employers must take
particular care to preserve the evidence for legal
authorities and to not destroy any equipment,
emails, or files that make contain such evidence.


Disciplining Employees Who
Misuse Social Media
There are a myriad of scenarios that may prompt an employee who, for example, posts pictures
an employer to discipline an employee for his or of himself intoxicated at a party on social media
her social media use. The most obvious situation (assuming the employee is over 21 years old). In
is an employee who engages in illegal Web-based contrast, the employer may have more leeway
activity while at work. Another common scenario where the conduct is illegal. The following states
is an employee who spends the majority of his or have lawful conduct laws:
her on-duty time using Facebook or surfing the
Internet. Other situations may include employees
who criticize a supervisor or client, post distasteful Some states have “lawful
photos or videos, or call in sick and then post conduct” laws that may protect
contrary information.
an employee or applicant’s
Before deciding to take an adverse employment legal off-duty activities.
action against an employee, based on his or her
social media use, employers should consider
whether there are legal constraints preventing or California: Provides that no employee shall
limiting such action. Some of the legal constraints be discharged or otherwise discriminated
employers must consider include: against for lawful off-duty conduct. The law
entitles any employee who is discharged,
The National Labor Relations Act. As discussed threatened with discharge, demoted,
above, the Act affords employees (even those suspended, or discriminated against in any
who are not unionized) the right to engage in manner in the terms and conditions of his
“concerted activity,” including the right to discuss or her employment to reinstatement and
the terms and conditions of their employment— reimbursement for lost wages and work
and even to criticize their employers—with co- benefits.
workers and outsiders. Not all concerted activities
are protected by the Act; only those activities Colorado: Makes it illegal for an employer
that are engaged in for the purpose of collective to terminate an employee because that
bargaining or other mutual aid or protection are employee engaged in any lawful activity
covered. Thus, before disciplining an employee off the employer’s premises during
who, for example, has complained about the nonworking hours unless the restriction
employer on his or her blog or Facebook page, 1) relates to a bona fide occupational
an employer must determine if the employee has requirement or is reasonably and rationally
engaged in protected concerted activity. related to the employment activities and
responsibilities of a particular employee
Legal off-duty activities. Watch out for unique or a particular group of employees; or 2) is
state laws. Some states have “lawful conduct” necessary to avoid, or avoid the appearance
laws that may protect an employee or applicant’s of, a conflict of interest with any of the
legal off-duty activities. Thus, in some states, an employee’s responsibilities to the employer.
employer may be prohibited from terminating


Illinois: Prohibits workplace discrimination Nevada: Makes it unlawful for an employer
on the basis of the use of lawful products to fail or refuse to hire a prospective
except where the employer is a nonprofit employee or to discharge or otherwise
organization that, as one of its primary discriminate against an employee
purposes or objectives, discourages the concerning his compensation, terms,
use of one or more lawful products by the conditions or privileges of employment,
general public. because he engages in the lawful use of
any product outside working hours and off
Minnesota: Prohibits an employer the employer’s premises if that use does
from refusing to hire a job applicant not adversely affect his ability to perform
or disciplining an employee for using his job or the safety of other employees.
lawful consumable products, if the
products are used off the employer’s New York: Makes it unlawful for an
premises outside of working hours. employer to make hiring or firing decisions,
Provides for an exception related to a or otherwise discriminate against an
bona fide occupational requirement that employee or prospective employee because
is reasonably related to the employment of that individual’s legal use of consumable
activities or responsibilities of a particular products or legal recreational activities
employee or group of employees or where outside of work hours, off of the employer’s
it is necessary to avoid a conflict of interest premises, and without use of the
or the appearance of a conflict of interest. employer’s equipment or other property.
There is an exception for protected activity
Montana: Provides that an employer that creates a material conflict of interest
may not refuse to employ, license, or related to the employer’s trade secrets,
discriminate against an individual with proprietary information or other proprietary
respect to compensation, promotion, or or business interest.
the terms, conditions, or privileges of
employment because the individual uses a North Carolina: Prohibits an employer
lawful product off the employer’s premises from refusing to hire a prospective
during nonworking hours, unless such use employee, or discharging or otherwise
1) affects an individual’s ability to perform discriminating against any employee
job-related employment responsibilities with respect to compensation, terms,
or the safety of other employees; 2) conditions, or privileges of employment
conflicts with a bona fide occupational because the employee or prospective
qualification that is reasonably related to employee lawfully uses lawful products
the individual’s employment; 3) conflicts off the employer’s premises during
with a professional service contract where nonworking hours and such use does
the unique nature of the services provided not adversely affect the employee’s job
authorizes the employer to limit the use performance or the person’s ability to
of certain products; or 4) is prohibited by properly fulfill the responsibilities of his
a nonprofit organization employer that, as position or the safety of other employees.
one of its primary purposes or objectives,
discourages the use of one or more lawful
products by the general public.


Wisconsin: Prohibits any employer, labor public health and safety, as well as employees
organization, employment agency, licensing who report potential securities fraud violations.
agency, or any other person from engaging For example, the Sarbanes-Oxley Act of 2002
in any act of employment discrimination (SOX) prohibits employers from terminating
on the basis of the use or nonuse of lawful employees for “providing information, causing
products off the employer’s premises information to be provided, or otherwise assist[ing]
during nonworking hours. in an investigation regarding any conduct which
the employee reasonably believes constitutes
Laws related to political activities and affiliations. a violation of … any rule or regulation of the
Many states, including California, prohibit Securities and Exchange Commission, or any
employers from regulating employee political provision of Federal law relating to fraud against
activities and affiliations or influencing employees’ shareholders.” The investigation, however, must
political activities. Taking action against an be conducted by, among others, a person with
employee for objectionable political speech could supervisory authority over the employee. An
violate these restrictions. employee who reports alleged securities fraud on a
company blog monitored by management to detect
Discrimination claims. Employers are prohibited
improper activities within the workplace could be
from unlawfully discriminating against employees
protected, for example, under SOX.
on account of protected characteristics, including
race, age, sexual orientation, marital status, Ultimately, hiring, disciplining, and firing are all
disability, and even genetic information. If an critical parts of the employment relationship,
employer learns from an employee’s Facebook and what is appropriate social media use in one
status, for example, that the employee is pregnant, workplace may not be in another. An employer
the employer cannot fire the employee on relying on Web-based information to make
account of the pregnancy. Employers should also these decisions should be aware of potential
keep in mind that an employee terminated for legal repercussions and consult with a human
inappropriate social media use may later assert resources professional knowledgeable in this
that the employer’s actions were discriminatory. area to manage the risks inherent in any adverse
employment decision.
Whistleblower statutes. Federal and state
whistleblower laws may protect employees who
complain about company conditions affecting


Monitoring and Regulating
Employees’ Use of Social Media
Supreme Court finds government employer’s conducted for a “noninvestigatory, work-related
search reasonable purpose” or for the “investigation of work-related
In a unanimous decision, the U.S. Supreme Court misconduct.” A search is reasonable in scope
held that the City of Ontario’s review of transcripts where the measures used are reasonably related
of an employee’s text messages sent and received to the objectives of the search and not excessively
on a City-issued pager was a reasonable search intrusive under the circumstances.
under the Fourth Amendment. City of Ontario, Calif.
v. Jeff Quon, et al., No. 08-1332 (June 17, 2010).
The Court avoided deciding whether public
All employers, public and
employees have a reasonable expectation of private, must be prepared with
privacy in text messages sent on employer-owned comprehensive computer and
equipment under the Fourth Amendment and
what particular standard ought to apply in making electronic equipment usage policies.
that determination. It acknowledged that rapid
changes in communications and the means by Applying these standards, the Court held that the
which information is transmitted, as illustrated City’s review of Quon’s text message transcripts
by advancements in technology and what society was reasonable. According to the Court, the search
views as proper behavior, created significant had a clear noninvestigatory, work-related purpose
challenges to setting legal standards for the at its inception—to evaluate whether the monthly
workplace that would survive the test of time. The character limit was sufficient for the City’s needs
Court noted, “Prudence counsels caution before and to ensure that employees were not paying out-
the facts of the instant case are used to establish of-pocket for work-related expenses.
far-reaching premises that define the existence,
and extent, of privacy expectations enjoyed The extent of an expectation of privacy, the Court
by employees when using employer-provided reasoned, is relevant to assessing whether
communications devices.” the scope of a search is reasonable. Moreover,
“employer policies concerning communications
So, the Court assumed, without deciding, that will of course shape the reasonable expectations
the employee had a reasonable expectation of of their employees, especially to the extent that
privacy in his text messages and the case could such policies are clearly communicated,” the
be decided on narrower grounds, i.e., whether the Court said.
search was reasonable under well-defined Fourth
Amendment standards. All employers, public and private, must be prepared
with comprehensive computer and electronic
Under the Fourth Amendment, a government equipment usage policies. The Court noted that
employer is permitted to conduct a workplace these policies will help shape an employee’s
search without a warrant where it is (i) “justified expectation of privacy. Further, it is critical that
at its inception” and (ii) reasonable in scope. A practices and policies be consistent, reflect current
search is “justified at its inception” where it is technologies, and be clearly communicated.


Employers also should consider requiring seclusion or private affairs or concerns, (3) which
employees to acknowledge in writing that would be highly offensive to a reasonable person.
they received and reviewed these and similar An employer may successfully defend against such
policies and procedures, particularly as new claims by establishing that the employee did not
technologies are introduced. Because this area of have a reasonable expectation of privacy in the
the law continues to evolve, as evidenced by the electronic communications. Courts are generally
Court’s refusal to expand its holding beyond the more inclined to rule in the employer’s favor where
narrow confines on this case, a well-drafted and the employee voluntarily uses an employer’s
communicated policy will be critical in addressing network and/or computer and consented to be
an employee’s expectation of privacy in connection monitored or was advised of the employer’s written
with electronic communication and preserving electronic communications policy.
the employer’s ability to review and monitor those
communications. Federal Wiretap Act and the Electronic
Communications Privacy Act (ECPA) of 1986,
Monitoring employees’ social media use: amending the Federal Wiretap Act of 1968. ECPA
Privacy concerns imposes criminal and civil penalties against
Considering the significant potential liability any person who intentionally intercepts an
and other risks employers face from employees’ electronic communication with certain specific
social media use, how far can employers go in exceptions, including an “ordinary course of
monitoring these communications? Although business” exception. The Stored Communications
the Fourth Amendment to the U.S. Constitution Act (“SCA”), part of the ECPA, covers stored
prohibits unreasonable searches and seizures by electronic communications. In one recent case,
the government, it does not apply to private sector a federal court in New Jersey rejected the
employers. While private sector employees have no employer’s attempt to throw out a jury verdict
inherent constitutional right to privacy, employer against managers at a Houston’s restaurant who
conduct is limited by common-law principles and intentionally and without authorization accessed a
federal and state privacy laws, including: private, invitation-only chat group on MySpace in
violation of the federal SCA.
TORT: “Intrusion upon the plaintiff’s seclusion
or solitude.” Private-sector employees have State Law. Various states protect a person’s right
common law “privacy rights” which are enforced to privacy through statutes or state constitutions.
through tort claims based on invasion of privacy Some states prohibit electronic monitoring of
theories. The most applicable theory to employer- employee communications without two-party
monitoring of electronic communications is consent. Employers should check the relevant
“intrusion upon the plaintiff’s seclusion or state privacy laws before monitoring employees’
solitude.” Under this theory, an employee must social media use.
prove: (1) an intentional intrusion, physical or
otherwise, (2) upon the plaintiff’s solitude or


Strategies for Regulating Electronic
Communications
Whether employees are communicating with Again, in compliance with the decisions of the
friends outside the company or with coworkers National Labor Relations Board discussed above,
and business partners regarding work-related employers should also consider amending
projects, employers should have clear policies their handbook policies to provide a detailed
regarding the use of social media both in and explanation of what is considered “acceptable
outside the workplace. Employees—who may use” (i.e., business use only, limited personal
not realize they can expose employers to risk use, or unlimited personal use). Employers
by posting information on blogs and private can also implement a policy that reduces the
social networking sites during work or non-work level of privacy employees expect in their work
hours—should be informed of potential risks and computer systems, email, and Internet use.
aware of the employer’s expectations. Indeed, courts have routinely considered whether
an employer has an electronic communications
The precise contours of an employer’s social policy in determining whether an employee
media use policy will depend on the organization, had a reasonable expectation of privacy. While
its culture and approach to social technologies, such a policy will not necessarily insulate an
and the nature of work performed. For instance, employer from all potential liability, it will reduce
a social media use policy for educators may be employees’ expectations of privacy and provide
very different from a policy aimed at employees the employer with more discretion to take action
who are encouraged to use social media for against employees who engage in misconduct.
developing client relations. However, there are
some basic issues employers should address
when implementing a social media policy.

In compliance with the decisions of the National
Labor Relations Board discussed above,
employers may take several actions. Employees
should be warned that postings regarding: (1)
proprietary and confidential company information;
(2) discriminatory statements or sexual innuendos
regarding coworkers, management, customers,
or vendors; and (3) maliciously false statements
regarding the company, its employees, customers,
competitors, or vendors will not be tolerated
and will subject the individual to discipline.
Confidential and proprietary information of the
Company must be appropriately defined to avoid
running afoul of recent NRLB decisions.The policy
should specify that these prohibitions apply to
postings and blogging occurring at any time, on
any computer.


Basing Hiring Decisions on
Information Obtained from
Social Media
As discussed earlier in this report, employers applicants to submit certain information with
frequently use social media to obtain information their resume or application; searching social
about job applicants. So long as the employer networking sites may reveal such information and
does not violate state or federal discrimination open the employer to the very risk it tried to avoid.
laws, nothing currently prohibits an employment
decision based on information an applicant places Other issues include learning about an applicant’s
in the public domain. Nevertheless, employers arrest history, conviction, or workers’ compensation
should balance the need to obtain information claim. Similarly, federal law prohibits employers
against the risks associated with acting on such from discriminating against an applicant based
information if it reveals an applicant’s protected on the employee’s current or prior filing for
characteristics. bankruptcy. Employers must be careful of state
and federal laws that prohibit employment
discrimination on account of such information.
When using social media to vet
Employers should also avoid circumventing
job candidates, an employer may a potential employee’s privacy settings by
inadvertently become aware pretending to be someone else in order to gain
access to a restricted network.
of an applicant’s protected
characteristics, such as race, age, One practical option is to have someone who is
not a decision maker at the company conduct the
sexual orientation, marital status, search in order to filter out protected information.
disability, and even genetic This person can then provide the “scrubbed”
information protected under information in document form to a decision maker
for review.
federal law.
Another risk of using social media and other
information obtained on the Internet to screen
When using social media to vet job candidates, applicants is that the information discovered
an employer may inadvertently become aware may be inaccurate or misleading. For example,
of an applicant’s protected characteristics, such a website seemingly run by, or affiliated with, a
as race, age, sexual orientation, marital status, job applicant may not actually be related to, or
disability, and even genetic information protected even known by, the applicant. Additionally, false
under federal law. Some states also prohibit information may be posted on blogs and other
discrimination on account of sexual orientation, social networking sites. Reputable news sources
political affiliation, and off-duty conduct. If the are continually coming under fire for relying upon,
employer decides not to hire the applicant, he without fully checking, Internet-based postings.
or she could sue the employer, alleging that the Employers should keep this in mind when turning
decision was discriminatory. This is the precise to the Internet for information about job applicants.
reason many employers have stopped requiring


Question of Social Media Account
Ownership Need Not Be a Problem
for Employers
Forward-thinking companies also embrace social business during his employment. When he left,
media, networking sites and blogs for, among he changed the Twitter account handle and
other things, branding, client development and continued to use the account. PhoneDog and its
service, research, and marketing. While the former employee do not have a written agreement
benefits could be significant, social media use is pertaining to ownership of the disputed Twitter
not without challenges for employers. account. The company alleged several claims
against the departing employee, including
misappropriation of trade secrets, conversion, and
One hot area is disputes between tortious interference with prospective advantage.
employers and departing
Another example is Eagle v. Morgan, 2011 U.S.
employees over the ownership Dist. LEXIS 147247 (E.D. Pa., Dec. 22, 2011). A
of social media accounts. Such federal court in Pennsylvania denied a motion to
disputes are on the dockets of dismiss a suit over an employee’s LinkedIn account.
The disputed LinkedIn account was developed
several federal district courts by company personnel and used for company
throughout the country. business. As in PhoneDog, the parties do not have a
written agreement as to ownership of the account.

One hot area is disputes between employers and These cases may be headed into prolonged and
departing employees over the ownership of social extensive litigation. They may have been avoided
media accounts. Such disputes are on the dockets had the parties entered into clearly written
of several federal district courts throughout the agreements at or near the inception of the
country. Employers in these cases are asserting employment relationship. Such an agreement was
ownership over company Twitter and LinkedIn upheld in Ardis Health, LLC v. Nankivell, 2011 WL
profiles claiming, among other things, that they 4965172 (NRB) (S.D.N.Y., Oct. 19, 2011). A federal
contain “trade secrets.” Employees dispute these court in New York granted a preliminary injunction
contentions by pointing out that there is nothing requiring an employee to give her employer access
“secret” about social media profiles and that to social media sites pursuant to obligations under
employers have no inherent property interests in the parties’ written Nondisclosure and Rights to
Twitter and LinkedIn accounts. Work Product Agreement.

In PhoneDog v. Kravitz, 2011 U.S. Dist. LEXIS Employers who profit from their employees’
129229 (N.D. Cal., Nov. 8, 2011), for example, a use of social media should carefully analyze
federal court in California denied a motion to these issues. In many cases, a properly drafted
dismiss where the employer sought damages for agreement delineating the property interests in
each Twitter follower that a departing employee employee work product will save employers from
took with him. The employee was given use of and time-consuming and expensive litigation over
maintained a Twitter account for the employer’s ownership of social media accounts.


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